SECTION 108 FOREIGN CURRENCY PROGRAM

January 2002

The Section 108 Foreign Currency Program provides cost-sharing assistance in the form of foreign currencies to both the public and private sector for the development, maintenance, and expansion of long-term export markets for U.S. agricultural products and agricultural technical assistance.

FAS administers the program through cooperative agreements that authorize successful applicants the opportunity to work closely with FAS and its overseas offices to conduct these activities. Preference is given to nonprofit U.S. agricultural and trade groups that represent an entire industry or are nationwide in membership and scope. Priority is given to proposals that target markets with the greatest growth potential.

The program allows all segments of U.S. agriculture, including those associated with small-volume export commodities, to participate in efforts to build export markets. The overseas promotions focus on generic U.S. commodities, rather than individual brand-name products, and are targeted toward long-term market development.

FAS has established a "Quick Response Emergency Fund"(QREF), within the Section 108 Foreign Currency Program, to provide rapid funding to help recipients capitalize on time-sensitive, new market openings and opportunities. FAS provides specific criteria and instructions in a program notice {Section 108-01001}.

BACKGROUND:

The Foreign Agricultural Service (FAS) may provide cost share assistance, using available currencies of Dominican Republic, Jamaica, Sri Lanka and Tunisia, to provide assistance in market development and agricultural technical assistance activities, commonly referred to as the "Section 108 foreign currency program." These foreign currencies were acquired by USDA pursuant to agreements made under Title I of the Agricultural Trade Development and Assistance Act of 1954, (Pub. L. 480).

Title I, Pub. L. 480 authorizes the U.S. government to finance the sale and exportation of agricultural commodities to foreign governments on concessional terms. Between 1986 and 1991, the U.S. entered into various Title I, Pub. L. 480 agreements with foreign governments, on terms which allowed repayment to the United States in local currencies. Section 108 of Title I, Pub. L. 480 authorizes the U.S. government to use these foreign currencies to implement market development and agricultural technical assistance activities.

On January 8, 2002, FAS published a notice in the Federal Register (67 FR 862) inviting proposals to use currencies of the Dominican Republic, Jamaica, Sri Lanka and Tunisia for market development projects and technical assistance activities.

FAS must disburse local currencies to program participants, through the disbursing officer in the U.S. embassy in the country of origin. That is, FAS cannot convert the local currency to any other currency prior to disbursement. Activities funded with Section 108 currencies are not limited to the country where the currency originated. It is the responsibility of the recipient to arrange for receiving and using the foreign currencies made available, or converting the funds to other currencies. Approximately 28 million Dominican Republic pesos; 210 million Jamaica dollars; 12 million Tunisia dinars; and 1.7 million Sri Lanka rupees are available.

Application Process

To participate in the Section 108 Foreign Currency Program, parties interested in using these local currencies to develop markets for agricultural commodities, or to undertake technical assistance activities, should submit proposals on paper to: Marketing Operations Staff, Foreign Agricultural Service, U.S. Department of Agriculture, Room 4932-S, Stop 1042, 1400 Independence Ave., SW, Washington, D.C. 20250- 1042. Telephone: (202) 720-4327 FAX: (202) 720-9361.

All proposals on diskette (with two accompanying paper copies and a signed SF-424) and any other proposals must be delivered to one of the following addresses:

Hand Delivery (including FedEx, DHL, UPS, etc.): U.S. Department of Agriculture, Foreign Agricultural Service, Marketing Operations Staff, Room 4932-S, 14th and Independence Ave., S.W., Washington, D.C. 20250-1042.

U.S. Postal Delivery: U.S. Department of Agriculture, Foreign Agricultural Service, Marketing Operations Staff, STOP 1042, 1400 Independence Ave., S.W., Washington, D.C. 20250-1042.

All applicants must include the Standard Form 424 (SF-424) in conjunction with their proposal. Standard Forms may be downloaded from: http://www.fas.usda.gov/mos/108/sf424.pdf
This .pdf site allows one to print a paper copy of the form that can be completed by hand or typewriter.

PROPOSAL CONTENT:

FAS recommends that proposals to participate in the Section 108 foreign currency program contain, at a minimum, the following:

(a) Organizational information, including:

• Organization's name, address, Chief Executive Officer (or designee), and Federal Tax Identification Number (TIN);
• Type of organization, e.g., corporation, non-profit organization;
• Name, telephone number, fax number, and e-mail address of the primary contact person;
• If a trade organization, a description of the organization and its membership;
• A description of the organization's prior export promotion experience; and
• A description of the organization's experience in implementing a trade or technical assistance activity;

(b) Market information, including:

• An assessment of the targeted market;
• A long-term strategy in the market; and
• U.S. export value/volume and market share data and goals for 1999-2004;

(c) Project information, including:

• A brief project title;
• Request for funding in one of the available foreign currencies;
• A brief description of the specific market development trade constraint to be addressed by the project, performance measures for the years 2002-2004 which will be used to measure the effectiveness of the project, a benchmark performance measure for 2000, the viability of long term sales to this market, the goals of the project, and the expected benefits to the represented industry;

Note: Proposals for technical assistance activities should also describe how the technical assistance will enhance the local market's food and rural business systems, and impact on transformation of the host country's economy to a free market system.

• A method for evaluating and reporting results;
• A description of the activities planned to address the constraint; and
• An itemized list of all estimated costs associated with each project activity for which reimbursement will be sought. All interested parties should review 7 CFR 3019, which discusses eligible and ineligible expenses, prior to submitting a proposal;

(d) Information indicating all funding sources and amounts to be contributed by each entity that will contribute to implementation of the proposed project. This may include the organization that submitted the proposal, private industry entities, host governments, foreign third parties, Commodity Credit Corporation, FAS, or other Federal agencies. Contributed resources may include cash, goods, and services;

(e) A completed Standard Form 424 (SF-424). Standard Forms may be downloaded from: http://www.fas.usda.gov/mos/108/sf424.pdf
This .pdf site allows one to print a paper copy of the form that can be completed by hand or typewriter.

REVIEW PROCESS AND ALLOCATION CRITERIA:

FAS will provide financial assistance under this program on a competitive basis and applications will be reviewed against the evaluation criteria contained herein. FAS will consider the following factors when evaluating proposals:

• The overall quality of the proposal;
• The ability of the organization to provide an experienced staff with the requisite technical and trade expertise to execute the proposal;
• The funding request and the organization's willingness to contribute resources, including cash, goods and services of the U.S. industry and foreign third parties;
• The conditions or constraints affecting the level of U.S. exports and market share for the agricultural commodities and products;
• The degree to which the proposed project is likely to contribute to the creation, expansion, or maintenance of the targeted foreign market; and
• The degree to which the organization's strategic plan is coordinated with other private or U.S. government-funded market development projects.

Proposals will be evaluated by the applicable FAS commodity division. The divisions will recommend funding levels for each applicant based on a review of the applications against the factors described above. The purpose of this review is to identify meritorious proposals and to suggest an appropriate funding level for each application based upon these factors.

Meritorious proposals will then be reviewed by FAS executives for the purpose of allocating available funds among the applicants. Proposals will compete for funds on the basis of the following allocation criteria.

First priority consideration will be given to proposals which target the growth markets listed below. These developing markets account for a significant share of world imports of major farm commodities and much of the projected long-term growth in global import demand. As such, they are expected to be among the most supportive of USDA's primary export objective of increasing the U.S. share of world agricultural trade.

First priority growth markets for allocation of Section 108 funds: Brazil, countries in Central America, Chile, China, Egypt, India, Indonesia, Malaysia, Mexico, Philippines, Russia, South Africa, South Korea, Thailand, Turkey and Vietnam. First priority consideration will also be given to proposals which target the countries from which the foreign currencies originate, i.e., Dominican Republic, Jamaica, Sri Lanka and Tunisia.

Second priority consideration will be given to proposals which target other markets where growth prospects for the relevant agricultural product is high. These proposals would serve to open new markets or bring about substantial growth in existing markets.

In all cases, preference is given to nonprofit U.S. agricultural trade organizations that represent an entire industry or are nationwide in membership and scope.

FAS may also consider proposals on an accelerated basis if an urgent marketing opportunity becomes available. Details concerning the accelerated review can be obtained from the Section 108 program notice number 108-01001 at the following URL address: http://www.fas.usda.gov/mos/108/Program%20Notices/10801001.html by calling the contact listed below.

AGREEMENTS:

Following approval of a proposal, FAS will enter into an agreement with the organization that submitted the proposal. Agreements will incorporate the project details as approved by FAS and specify any other terms and conditions applicable to project funding. Agreements include the maximum amount of funds, in local currencies rather than U.S. dollars, which may be made available for a participant's approved activities. All agreements with non-profit organizations under this program are administered under 7 CFR 3019 - Uniform Administrative Requirements for Grants and Cooperative Agreements with Institutions of Higher Education, Hospitals, and other Non-profit Organizations.

FOR FURTHER INFORMATION CONTACT: Marketing Operations Staff, Foreign Agricultural Service, U.S. Department of Agriculture, Room 4932S, STOP 1042, 1400 Independence Ave., S.W., Washington, D.C. 20250-1042, (202) 720-4327.

Last modified: Thursday, October 14, 2004 PM